When GM CEO Roger Smith wanted to create a different kind of car company (like he didn’t have several already), he commissioned a Saturn factory in Spring Hill, TN. For a short time, the factory, the brand, the model they built, the dealers who sold them and the customers who bought them all lived happily ever after. And then the GM borg assimilated Saturn. At first, they neglected it. Then they gutted it like a fish. Then they stocked dealers with a bunch of unloved German-style imports, built somewhere other than the Volunteer State. And now, that pioneering Saturn factory builds GM’s fourth badge-engineered Lambda platform. The Chevy Traverse is not doing well, saleswise. In fact, LSJ.com reports that the TN factory producing these unloved CUVs is currently operating at 24 percent of capacity. That’s after the General spent, wait for it, $690 million re-equipping the plant for the task. And remember what we said about politics informing GM’s business decisions? Check this out . . .
Erich Merkle, a Grand Rapids-based auto analyst, thinks Spring Hill could be jettisoned in favor of GM’s Lansing Delta Township assembly plant. That’s because the crossovers made there – the Buick Enclave, GMC Acadia and Saturn Outlook – are sister vehicles to the Traverse.
The Delta Township plant also has excess capacity. GM eliminated the second shift at the plant at the end of March, cutting production and throwing hundreds of people out of work.
At current sales levels, all four vehicles could be built at either plant, but politics could give the Michigan plant the edge, said Merkle, who has speculated before that Traverse production could end up at the Lansing Delta Township plant.
“Spring Hill could be on the bubble because it’s in a red state and Michigan is a blue state,” Merkle said. “The governor of Michigan is a Democrat, too, and she needs all the plants she can get.”
And here’s the money shot:
The Delta Township and Spring Hill plants should be safe if operating decisions are made rationally, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
The guy who gave Detroit the ammo to scarf federal bailout bucks is warning us about irrational operating decisions by the federally controlled automaker. That’s Rich. [Thanks to matttstairs for the link]
When Roger Moore went after Roger Smith about his terrible managment of GM, many thought it was over the top. But just think of the admission Smith made when he opened Saturn in Tenn. He was saying, we can’t do this in any of our nearly 100 assembly plants as they are all obsolete and strangled with bad work rules making poor products. We need to not be GM to make successful cars. Even assuming that GM could stay focused long enough on Saturn to make it a success (something we know was impossible with their management) what was to be done with the 90 some percent of GM that was not Saturn? If Smith couldn’t fix the “old GM” nearly twenty years ago, and had to start over, what did that say even then of GM’s chance of survival? It was all there, but many of us didn’t see it for what it was, an admission of abject and total defeat by GM in their core business.
@ Jerry Weber:
Roger Moore = James Bond
Michael Moore = Film maker
I went and read that article, and I think David Cole is way off base. He believes that both facilities “should be safe if operating decisions are made rationally”. ‘Rationally’ to him means that GM will soon need the capacity to produce more CUVs than either plant has the capacity to on their own. In other words, ‘rationally’ means that sale of the Lambda SUVs will magically jump from 173,000 units per annum, to over 300,000.
Rationally, both factories should not remain open. Even if demand jumped to 350,000 units, GM would still only be using 60% of their capacity. Still not a money making proposition.
The rational answer of which plant to close can only be known with internal GM numbers and costs
Now whoever ends up with the Saturn brand and dealer network can also get the Spring Hill assembly plant. This could be a great opportunity for one of the Chinese car companies. Or, if Fiat really wants back in the U.S., this should be a much better arrangement than a shotgun marriage to Chrysler.
My parents and brother bought multiple Saturns over the years. They loved the new way of doing business – no haggle, no nonsense, better than average service departments, and what seemed like a basic respect for the customer. They even enjoyed the “send-off” they got when they bought a car (my parents still have the photos).
Roger Smith certainly had his shortcomings, but the idea of a “new kind of car company” was right on. Sadly Saturn was crushed by the “old kind of car company”.
Joe McKinney
I like that idea. Springs Hill should go with whoever buys the brand.
I’d put all the plastic tooling and stuff. And the tooling to make Aura and Astra there in the US
Maybe not Fiat, they could produce their current lineup, or bring some cool Opels (Corsa, Astra and Insignia come to mind) to the US once Opel is “released” from GM
@ mikey610 – Freaking hilarious!
@ Joe McKinney – I was thinking the same thing. If GM’s kicking Saturn to the curb, that should be a great opportunity for another foreign make to either expand their U.S. operations, or to make a start. Spring Hill isn’t as old and outdated as the other shuttered plants that belong to GM and Chrysler. It could even give a Chinese upstart some product to work with if they can use the current Saturn lineup in some agreement with GM for the time being.
It’s a real shame to see GM piss away what they had with Saturn. They started out as a truly different way to do things and wound up getting caught up in the GM black hole.
Smith needed desperately to fix GM, not to throw up his hands in disgust and try to start over with yet another brand name. Starting Saturn was a massive strategic error from the get go. Many of the ideas which were tried at Saturn were great ideas, but applied to the wrong place. GM needed to fix what it had, but the company never had the combination of smarts and guts at the top ranks to get it done. Still doesn’t.
Tooling up Spring Hill to start building the fourth variation on the Lambda platform was a massive tactical blunder. Four Lambdas, all competing for essentially the same customers? Stupid. Retooling the small car line at Spring Hill for the latest SUV Hail Mary. Dumb. Those of us who criticized the decision back when it was made had it right.
Erich Merkle is looking for political excuses where none are required. Spring Hill never should have been added to the Lambda production base and is the obvious candidate to mothball.
“A different kind of car, a different kind of company” was a visionary concept and initially showed great promise. The problem is, most of the time, people (including our fearless captains of industry) are more worried about trying to keep things the same than they are with changing with the times. That type of thinking wrecked a good idea.
I am reminded of a motivational speaker I heard once (can’t remember name). He said that normally the only people that welcome change are babies with wet diapers.
However, on the bright side, economic crises like our current one, have a way of burning off all the dead wood and leaving room for new growth and innovation.
The gutting of Saturn was so sad. Saturn actually switched my brother from imports back to American cars. He even bought a second one, despite how little they had advanced because GM starved the brand. That was his last Saturn. He wasn’t fooled by the rebadged ones.
As an owner of a 1991 SL-1 back then I can state the cars were a lot different and better than anything GM was making at the time. They sold well and had awesome resale value for a number of years. I got 72% back on mine when I sold it 4 years later, better than Acura or Lexus at the time.
Then GM turned Saturn into another badge engineered turd. In 2003 I rented a brand new Saturn sedan. I was prepared to be impressed with how far they came and instead realized it was a Chevy with Saturn badges. Terrible handling, interior was crap, drive line was goofy and unresponsive. The dash light was bulb that shined down on it from above. Not cool, cheap.
The disappointment was complete and when I went looking for a new car in 2004 I didn’t even consider Saturn,
The idea was that Saturn would be a laboratory / proof-of-concept which would then lead to lessons being applied back to the rest of GM. This is a fine idea if you can actually enforce that the lessons really be learned.
Of course, we know how that turned out.
I bought a 1992 SL2, brand new and really liked the car and buying experience. It was much better than the Cavalier I owned and the dealership was plainly trying harder than the Chevy dealership.
It’s too bad that GM never gained anything from Saturn. It could have changed the US car industry. But like has been said earlier, the established players didn’t want change.
The lack of new product was pathetic and placing Geo’s in Chevy dealerships (instead of making some of that stuff for Saturn) made sure that Saturn was doomed.
When Roger Smith retired from GM, Saturn lost its main champion. The other divisions were jealous of Saturn.
GM was rapidly running out of money in the early 1990s – it almost filed for bankruptcy in 1992-93 – so the money that could have been spent to expand Saturn and update the S-Series was instead diverted to the other divisions. Saturn was starved for new product, while the new products from the established divisions never made much headway.
In the end, Saturn was a bigger fiasco for GM than the Edsel was for Ford.
John Horner:
Spring Hill never should have been added to the Lambda production base and is the obvious candidate to mothball.
Agreed. Of course, if the decision looks too political (thumbs down to Red Tennessee), then GM may have to write off a 1/2 million or so potential customers from the Volunteer State.
Obama’s in a bind. A lot of his hard core base wouldn’t be caught dead in a GM car. But if he pimps GM with subsidies, it sullies both him and the brand in more conservative fly-over country.
old story: GM has 4 versions of this vehicle. Two plants. Oversupply of everything.
solution: 2 versions. Standard (Chevy?). Deluxe (Buick?). Limited options on each version to keep costs down and to differentiate the versions.
Close one of the plants. I believe both plants are fairly new and have similar efficiencies. The choice may be difficult.
Smith needed desperately to fix GM, not to throw up his hands in disgust and try to start over with yet another brand name. Starting Saturn was a massive strategic error from the get go.
The problem wasn’t Saturn, the problem was that Smith (and lots of people before and after him) cannot affect change at GM. I don’t know if it’s calibre of the people GM promotes, or a corporate culture so sick it’s beyond repair. It’s probably both, truthfully.
Saturn was a reasonable strategy, because there was no way in hell Smith was going to be able to do the same with Chevrolet. The fault, perhaps, was in not putting the screws to Chevrolet after it was obvious that Saturn’s lessons were valid, if starving for volume. But could Smith have changed Chevy? Could anyone?
@mikey610 :
“@ Jerry Weber:
Roger Moore = James Bond
Michael Moore = Film maker”
I call BS!
Sean Connery = James Bond
Roger Moore = James Bond impersonator
This ought to go over well with Senator Corker.
Spring Hill could be on the bubble because it’s in a red state and Michigan is a blue state,” Merkle said. “The governor of Michigan is a Democrat, too, and she needs all the plants she can get.
You know damn well that regional geopolitics are at play when something like this is mentioned. Maybe Corker shouldn’t have egged Shelby on so much.
old story: GM has 4 versions of this vehicle. Two plants. Oversupply of everything.
solution: 2 versions. Standard (Chevy?). Deluxe (Buick?). Limited options on each version to keep costs down and to differentiate the versions.
I sort of agree, but my thought is that Buick should go bye bye in GM’s impending C11 (we all know it’s coming). In that case, the Chevy should range from pretty basic up to near luxury (offering leather and such), but leave the REALLY nice trappings for a Cadillac version to slot between the SRX and Escalade. Even if Buick survives, I think they’re better used to offer entry level luxury cars, or maybe more sensible luxury (think Lexus ES or the old Infiniti I30) that appeals to people that want luxo appliances. Cadillac should tend toward the younger richies, and the people that want driver friendly lux rides.
How proud I was when I purchased my brand new blue/black Saturn SC2 back in 1992. In retrospect, glad it was totaled in 1995 before I got the full impact of the oil consumption issue. But it was a safe car that protected me from serious injury.
It’s just tragic to see GM create something good and then let it wither and die on the vine. Such a toxic culture there. Sad
I bought a 1997 Saturn S sedan, the cheapest cause it had no power steering and you rowed it yourself, but loaded it myself with A/C, cruise, and a six speaker stereo. I bought it for two reasons. One, I got an amazingly reliable new car for $12,500 and two, I got a photo of the salesguy whaling on the plastic body panels with a Louisville Slugger.
Robert, who owns the Spring Hill plant? I assume GM property was used as collateral for earlier loans. Nobody needs its capacity right now, but it would be geographically convenient for future Nissan expansion.
I know Saturn has its enthusiasts, but when you look over what they write, it inevitably centers around two items:
1) The dealership experience was great
2) The car was reliable
The problem is that these should both be ASSUMPTIONS, not selling points. Yes, the dealers were nice, but a lot of other dealers were, too. Yes, the cars were reliable, but the competition – Japanese imports – were too.
That leaves nothing but the product to differentiate yourself with, and frankly, Saturn cars, reliable as they were, were not as nice as their competitors’ when it came to ride, styling, handling and power. And the age of the product was just outrageous – they were still selling a restyled version of the original Saturn car until 2003, 13 years after the design hit the market.
There’s only so much a nice dealership can do to sell THAT product against fresh designs from Honda and Toyota.
This happened because GM never committed to making good small cars until the last couple of years. Because the country was SUV-crazy, Chevy could get away without having a decent small car, but because Saturn was built around selling small cars, it devastated them.
This could have been cured by better product, but it never came. And then, early this decade, Saturn brought out its third generation compact out (I don’t even know or care to know its name), which was reliable but horrible in every other respect, and then tried to foist an ancient Euro-GM design off on compact car buyers (again, don’t know the model’s name, don’t care to know). Both were major flops.
The new generation of Saturn product is actually quite nice. The Astra is a rebadged version of a bestselling European compact, and the only thing it suffers from is the low value of the dollar. The Aura is a roomy, good looking, solid-driving midsize sedan, and if not for the cheap interior materials, it’d be extremely competitive with Camrys and Accords. The Saturn SUV lineup is also comprised of new and solid product.
Unfortunately, it all came too late.
And I wonder if GM wouldn’t have been better killing off Pontiac, which has basically two products that aren’t completely badge engineered.
Superbadd –
I think it’s Pontiac that needs to go, frankly. Aside from the G8 (which is a dynamite car, by the way), what do they have to sell? Nothing.
Buick has an OUTSTANDING luxury SUV (the Enclave), and I saw the new LaCrosse at the auto show this weekend – it would look right at home at a Lexus dealership. Beautiful outside, and the interior continues GM’s Enclave / CTS winning streak.
And wouldn’t the G8 platform, with an interior massaged by the Enclave / CTS team, make a GREAT new large luxury sedan for them?
I think Buick’s role will be to make Lexus-like premium cars to satisfy floatmobile enthusiasts, leaving Cadillac to compete more with BMW and Mercedes.
Erich Merkle is looking for political excuses where none are required. Spring Hill never should have been added to the Lambda production base and is the obvious candidate to mothball.
Agreed. And he’s not the only one.
GM is already making 3 versions in Lansing, it’s probably easier and cheaper to add the 4th to one plant, rather than adding 3 to the other. But maybe not. As already mentioned by someone above, the real numbers are only known to GM.
The Delta Twp plant was built in ’06. The Spring Hill plant is as old as Saturn itself. Stands to reason that the newer plant is probably more efficient.
But let’s not let facts and common sense get in the way.
@ FreedMike: I also think Pontiac needs to get axed. I think Chevy and Cadillac are the only ones that should definitely be left, with Buick as a possibility. Gone should be Saab, Hummer, Pontiac, GMC, and Saturn. The G8 would make a great Impala, or call it the Caprice like they do in other parts of the world. The Enclave would make a great Cadillac with an edgier style. Buick needs to focus on cars so that they don’t get so watered down.
I shed a tear for those you bought Saturn’s CUV, CSV for no-haggle price.
“I shed a tear for those you bought Saturn’s CUV, CSV for no-haggle price.”
Not to mention the people who got suckered into a Saturn Relay. GM’s departed minivan family was consistently the “D” student in its class.
Erich Merkle is looking for political excuses where none are required. Spring Hill never should have been added to the Lambda production base and is the obvious candidate to mothball.
Agreed. This point should be a no brainer, really. If the Michigan plant, which builds three vehicles, including the high margin, modestly successful Enclave, is already stuck with excess capacity, why would anyone keep the second facility operating when it builds a fourth vehicle that is a flop?
I am noticing this ongoing trend in which conservatives are injecting politics into business discussions where they just don’t belong. It is degrading into this capitalist/socialist, union/anti-union, red/blue dichotomy when the duality that should be at issue is profit/ loss.
GM was eager to destroy Saturn’s last vestiges of independence by converting its once hallowed ground into a Chevy plant. Now that the apocalypse is complete, they can shut it down, safely knowing that the ghost of Saturn has been banished for good. They may not be good at making stuff, but GM sure is good at breaking things, once they set their minds to it.
@derm81
I think that the Detroit 3 pulling their manufacturing plants out of so many states was a big mistake. The basically made themselves regional companies.
Totally leaving New York, New Jersey, Maryland, Delaware, Virginia, and Georgia (to name a few) didn’t leave Ford, GM, and Chrysler a lot of friends when they needed help. Looks like Tennessee is next.
FreedMike- Volvo sold the same car from 1975-1993. Nothing wrong with that. You don’t need to change for the sake of change.
“I shed a tear for those you bought Saturn’s CUV, CSV for no-haggle price.”
Saturns’ no-haggle price is pretty much the same as others’ haggle price. Plus I would have paid extra to not go through the “negotiation” process.
Saying the Traverse is a flop is disingenuous and incorrect. It’s actually been a great seller and the best selling vehicle in its class. Unfortunately, all vehicle sales are down so much that everything looks like a flop.
PCH,
You mean this Erick Merkle guy isn’t an objective auto industry guy, he is right winger?
Hey, maybe you are correct, or maybe you are seeing partisanship because it actually IS a political decision. It was a political decision to open the Spring Hill plant to begin with!
GM is too big, too regulated, and too intertwined with government at every level. Perhaps that isn’t helping them make better cars?
Freedmike: there was no “ancient GM-Euro design” foisted on compact car buyers.There was the S Series, The L [based on an Opel design,the Vectra, mid size]not a compact,the ION: 1st to use the new [and jointly developed with Opel] Delta platform, the VUE [another clean sheet platform ]which spawned the Equinox and Torrent and the badge engineered [circa 2004] Astra.
I know you don’t want to know the names, but which one of those did you mean by “ancient GM-Euro designs”?
Saying the Traverse is a flop is disingenuous and incorrect. It’s actually been a great seller and the best selling vehicle in its class.
You can’t look at the 24% capacity utilization figure, and possibly believe that the vehicle is a success.
If we had the average days of inventory, that would almost surely confirm this.
Obviously, GM is selling just a tiny fraction of what it expected to sell. They wouldn’t be looking at closing a factory that they just opened several months ago if your assessment was correct.
It was a political decision to open the Spring Hill plant to begin with!
Unless you’re referring to the property tax breaks that GM received in exchange for retooling the plant, this is another situation in which this political angle doesn’t belong.
PCH,
Taxes, but more importantantly away from the states with work cultures ruined by labor laws run amok.
Hmmm…
Spring Hill has been retooled. Now considered a Chevrolet plant or GM Spring Hill Manufacturing.
Yes, the Chevrolet Traverse is being built there. Outsold Toyota Highlander by 1100 vehicles in March 2009.
All ‘Saturn’ Spring Hill employees are now ‘GM’ employees.
Problem: Both LDT and Spring Hill build basically the same product. What to do? You need some facts:
LDT: Fairly new plant.
Spring Hill: 18 year old plant with a new 2008 billion dollar upgrade. A 18 year old plant would be considered ‘new’. Basically any car factory is simply 4 walls and a roof.
LDT is running 1 shift. Spring Hill is running 2.
LDT is working during the current ‘GM shut down’. Why?..1 shift. 1 shift is not cutting it at LDT in relation to market demand.
Spring Hill is working 2 shifts.
LDT is mouthing off the Traverse is comming to Lansing. How could they take on the Spring Hill work?
They can’t.
Spring Hill is building upwards of over 600+ Chevrolet Traverse’s per day.
LDT could not build the Chevrolets, plus Saturn, plus Buick, plus GMC models.
LDT is about 1/2 the size of Spring Hill. 3.4 million sq. feet vs 7.5 million square feet for Spring Hill.
Spring Hill offers stamping, powertrain, interior/exterior plastics, assembly. All onsite.
Also, being all of Spring Hill is now GM. IF the Traverse DID move to Lansing…all the Spring Hill guys could follow their jobs. Lots of former 602 and 652 UAW local workers.
One final fact. With the ‘Obama Auto Group’ overlooking all the plants very closly, and making chioces. The last thing you wannabe is a GM plant with only 1 shift. Your done.
Hi,
A very smart and diplomatic answer. It’s really appreciable and generous.
Miller
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